Strong appetite for travel helps Easyjet reduce losses over the winter period

Thursday 18 April 2024 7:40 am

Easyjet has continued to benefit from travellers’ strong appetite for travel in the wake of the pandemic. Today it reported an uptick in passengers and a reduction in the traditional “seasonal” winter losses in its half-year trading update.

The budget carrier – whose share price has been struggling under the weight of the cost-of-living crisis, a high fuel price, and a slowdown in bookings due to the ongoing geopolitical tensions in the Middle East – reported that passenger numbers were up eight per cent year-on-year and that its yield per ticket improved by nine per cent for the six months to the end of March.

It managed to reduce its winter losses, which are common with budget airlines, by over £50m and said it now expected to report a headline loss before tax of between £340m and £350m for the period.

It also saw a 206 per cent uptick in revenue from its Easyjet Holidays division.

Johan Lundgren, Easyjet’s CEO, said: “The importance that consumers place on travel coupled with Easyjet’s trusted brand has driven good demand for our flights and holidays. Our growth and focus on productivity has reduced winter losses…

“We are well set up operationally for this summer season, where we expect Easyjet to be one of the fastest growing major airlines in Europe, and take more customers on Easyjet holidays than ever before.”

The firm said outlook for the rest of the year was positive, expecting both Q3 and Q4 earnings to be up year-on-year.

It has sold 30 per cent of tickets for the rest of the year and 70 per cent of its planned schedule for the summer.

John Moore, senior investment manager at RBC Brewin Dolphin, said: “Easyjet has narrowed losses for this half of the year, which is generally slower due to the seasonality of travel. The airline has continued on its positive course of the last 18 months, buoyed by strong demand for holidays, while geopolitical tension in the Middle East should have limited impact.

“Overall, Easyjet is well capitalised, efficient, and growing through add-on services such as its Easyjet Holidays business. There are fears that the current level of demand for customers is a temporary boost for travel companies, with the share prices of some airlines failing to take off post-covid, but it seems likely consumers will continue to prioritise getting away.

“While Easyjet’s shares have made up some ground in recent months, they still remain way off where they were in February 2020 and, by most metrics, look very cheap relative to the wider UK market.”

In February, the firm’s founder, Stelios Haji-Ioannou, called for the operator to pursue a second listing in the US.